The report provides in-depth analysis on trends in reinsurance dedicated capital and on reinsurers' reported and underlying profitability.

Key findings from this report

  • Reinsurers delivered another exceptionally strong first-half performance, with the Gallagher Reinsurance Composite (The Composite)1 reporting a 19.9% ROE for 2026 HY, the second-highest half-year return in the past decade.
  • Following the strong first-half result, Gallagher Re now estimates The Composite is well positioned to deliver a reported ROE2 of 16.5-17.5% for full-year 2026, above the previous 14-15% estimate and materially above the industry's implied cost of equity.
  • By year end, The Composite will have earned USD13 billion excess profits over the COE cumulatively for the cross cycle 2017-2026 period, including a soft cycle.
  • Global reinsurance dedicated capital increased 5% in 2026 HY to a new high of USD688 billion, driven by continued strong momentum in non-life alternative capital.
  • Traditional reinsurance capital growth slowed to 4%, reaching USD541 billion in 2026 HY, with continued strong earnings increasingly offset by increased capital return to shareholders. Following stronger than expected growth, Gallagher Re now expects traditional capital to grow 6% for the full year.
  • Non-life alternative capital3 continued to expand strongly, increasing 9% in the first half to USD147 billion, supported by favorable returns, net inflows and continued cat bond growth, while also beginning to extend further into lines such as casualty.
Sources

1 The Composite represents the large Bermudian and the Big 4 European reinsurers which provide the granular disclosure needed to analyze trends in the underlying combined ratio and ROE.

2 Reported ROE estimate also assumes support from reserves releases and realized investment gains in line with 10-year average.

3 Alternative capital excludes life, accident and health (LAH) ILS AuM and mortgage ILS AuM.